Corruption as an Alternative to Limit Pricing
We explore to what extent bribery can be an alternative way of fighting rivals� entry on the market when there is uncertainty about the degree of corruption in the public sector. For high levels of corruption, �covert� fight through bribery is the optimal choice of an incumbent. For low degree of corruption, instead, the incumbent prefers to act strategically but overtly by playing a limit pricing game.
|Date of creation:||2011|
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- Vito Tanzi, 1998. "Corruption Around the World: Causes, Consequences, Scope, and Cures," IMF Staff Papers, Palgrave Macmillan, vol. 45(4), pages 559-594, December.
- Dixit, Avinash, 1979.
"The Role of Investment in Entry-Deterrence,"
The Warwick Economics Research Paper Series (TWERPS)
140, University of Warwick, Department of Economics.
- Vito Tanzi, 1998. "Corruption Around the World; Causes, Consequences, Scope, and Cures," IMF Working Papers 98/63, International Monetary Fund.
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